Jack Cox, president and CEO of Lakewood Ranch-based Halfacre Construction Company, shared the top four things people are talking about when it comes to commercial construction. Here’s what he said:
Two out of three isn’t bad!
Customers, predominantly in the public sector, want the lowest price, the fastest schedule and the highest quality work. We have found that it’s only possible to have two out of three of those things in order to be successful in delivering a quality commercial project. We never promise all three!
Planning saves the day
On-time deliveries are key in commercial construction, but it starts with setting up-front, realistic expectations with clients. At Halfacre Construction, we take a ton of time in the beginning planning stages of a project before we ever touch a shovel. Our pre-construction planning is really what sets us apart. We identify long lead-time items in advance and troubleshoot for that, which saves time in the end. We manipulate the schedule based on material and labor availability far in advance. A project that starts well ends well.
A labor of love
Right now, the biggest challenge in our industry continues to be a labor shortage. We see this with all trades but especially with electricians currently. Because there is a complete lack of trade schools here locally, we are forced to go outside the market to find skilled laborers, which is not ideal. This robust economy should give lawmakers a great opportunity to restructure some of our statewide and national programs to help alleviate this issue, but it won’t happen quickly; it will take time.
Live and die by the Fed
Everyone is talking about interest rates rising, which are expected to increase next month. Before this happens, now is a good time to get projects approved, financing secured and get started. Even though we continue to hover way below historical averages, eventually rate hikes will catch up and affect commercial spending. When times were bad but interest rates were super low, businesses paid cash for commercial projects because they had nowhere to put their money. I’d expect to see more of that if rates continue to rise above the 7.5 – 8 percent mark. Locally, the other thing that complicates that for business owners and governments is the high cost of land and rents. My biggest competitor is available land, and it’s difficult enough to make rents work when interest rates are low. I worry that we will see a larger impact due to that in Sarasota and Manatee counties. It can be also increasingly difficult to make the numbers work on industrial properties as rates rise. But ultimately, we are fortunate that consumer confidence remains high. I also think you’ll continue to see redevelopment opportunities inside the urban service boundary as one alternative.